The future of Energy: Clean and Green

Date:   Monday , January 05, 2009

With oil trading for less than $40 per barrel and the world immersed in a financial malaise, it is difficult to think about anything besides the most acute problems of home foreclosures, job losses, and investment losses. Nonetheless, once we traverse this period and the economy resumes its growth, the world will be faced with the single most challenging issue of our generation: the transition from utilizing fossil fuels to more clean and sustainable approaches.

The economic, geopolitical, and environmental reasons for making the transition have become apparent over the last few years. While there is general acceptance of the need to transition, many misunderstand its scope, the scale of the challenge, and the effort it will take. As I give speeches about energy and listen to speeches, with a few notable exceptions, the quantitative understanding of the scale of this endeavor is consistently underestimated.

While higher fuel prices will drive entrepreneurial zeal, the existing energy infrastructure, inertia, and scale will require additional public will and political leadership to drive a meaningful transition. These actions may include regulation, taxes, cap and trade subsidies, and other approaches that have all been discussed, especially by the incoming Obama administration. While I am not a fan of numerous regulations or aggressive taxation, for this challenge, these approaches are warranted.

My comments, within the space available, will quantitatively analyze some green approaches, which I hope encourage readers to study the issues in greater detail. While I do not have the column space to go into extensive details on each point, I would be happy to have a more in-depth discourse with those who are interested.

First, we should understand that the existing fossil fuel infrastructure has developed over several decades with trillions of dollars of investment. Consequently, except for tap water, gasoline (even at $4 per gallon) is the cheapest liquid one can buy. Natural gas, coal, and their downstream product electricity, are also relatively inexpensive. Converting all the energy used from different sources into watts (W) and extrapolating from numbers available a few years ago, the total annual energy consumption in the U.S. is roughly 4 Terawatts (1 TW = 1012 W) with 1 TW in electricity and the remaining 3 TW being burned primarily for transportation. The annual worldwide consumption is roughly 16 TW. These numbers are for the current situation. Over the next 40-50 years, the world population will increase by 50 percent. This population growth, coupled with world wide economic growth and improvements in standards of living, will increase the demand by a factor of 2 to 32 TW.

Now, let's examine the scale of these numbers with certain approaches for renewable energy obtained through photovoltaic (PV) process, biofuels (BF), and nuclear fission (NF).

In one hour the earth receives enough sunlight to power the planet for a year. Unfortunately, this sunlight is diffused and capturing a meaningful amount requires large surface areas. The average irradiance at the earth's surface is roughly 200 Watts per square meter. In solar cells that convert 10 percent of incident light into electricity, a square meter will generate 20 Watts continuously. Extending the calculation to 4 TW (the total energy demand of the U.S.), we need roughly 200,000 to 250,000 square kilometers of solar cells. When we juxtapose this area on a map of the U.S., this whole surface area fits in a space smaller than Rhode Island. So it appears feasible, but let us analyze closely.

Over the last few years, manufacturers have built large factories to build cells, and the industry has installed them rapidly. However, the cumulative total surface area of cells installed to date is less than 10 square kilometers. While 250,000 square km of deployed surface area seems feasible, our manufacturing capacity is 4 orders of magnitude below what is necessary. The industry has to grow at a compounded annual growth rate of 50 percent for 25 years to supply this demand, if we consider worldwide growth. Moreover, this calculation does not consider additional infrastructure requirements, costs, materials supply, storage (more on this below), and other factors. While solar energy is the most promising renewable option, the scaling challenges are considerable.

Growing corn or food products to manufacture ethanol is controversial. If technology enables the use of cellulosic materials like switch grass, which grow with minimal cultivation and do not compete with food growing capacity, the situation improves. However, let's evaluate the scale that is necessary for this approach to address our needs. A PV array can convert the 200 W irradiance in a square meter into 20 W electricity, but plants will only convert into chemical energy about 0.6 W of the 200W. Plants are two orders of magnitude less efficient than PV cells at converting sunlight. If we assume that we could convert the whole plant (not just a portion of the corn kernel) into biofuel, to get 4 TW we would need to plant roughly 9 million square kilometers, which is about 10 percent of the total land surface of the Earth. For 16 TW, we would need 40 percent of the surface, and even if we could consider these scales, the water limitations and competition with food would make this impossible.

So why are a lot of smart people supporting biofuel efforts? The first reason, mentioned earlier, is that the world has invested trillions of dollars to build the infrastructure to process, ship, and use liquid fuels (pipelines, gas stations, automobiles, and so on). While biofuels would require some modification of this infrastructure, it would be substantially less than for a pure electricity infrastructure that might arise from adoption of solar or nuclear technology. The second reason is that carbon-carbon and carbon-hydrogen bonds enable very high-density energy storage. For example, a teacup of gasoline can move a 2.5 ton automobile several miles at 60 miles per hour by liberating the energy in chemical bonds. A battery has to be orders of magnitude heavier to do the same, and it would take hours to charge. Again, as with PV, there is a place for biofuels in the green energy portfolio, but it will not solve all the problems primarily due to scale.

Nuclear reactors have demonstrated their capability to supply electricity, and despite concerns about safety, the record is quite good. Most nuclear reactors are roughly one Gigawatt in capacity. If we assume we need 4 Terawatts capacity, we will need 4,000 of these reactors, and 16,000 for 16 TW. If we build 4,000 in 40 years, that equates to 2 reactors commissioned per week for the next 40 years. And of course, uranium becomes the 'oil' of the future, while waste disposal becomes an insurmountable issue.

Similar analyses can be done for wind, hydro, geothermal, tidal power, and other approaches. The key message is that the greening of our energy supply will require utilization of all of these approaches, and technical breakthroughs may drive one or a few of them into greater utilization. While my personal bias is towards PV, as a society we should enact policies that do not require policy makers to choose winners or losers, but enable all to flourish and compete allowing the free market to determine the portfolio allocation. Most importantly, we should understand the scale of the problem and accelerate the journey because it will take a long time.

Dr. Amit Kumar is the President and CEO of CombiMatrix (CBMX:NASDAQ), a biotech company. He sits on the Boards of several green energy companies and is an investor in the space. He also speaks frequently about energy.